Archives : GOVT BITES THE BULLET - 18/01/2013.

GOVT BITES THE BULLET – 18/01/2013.

FINALLY DIESEL DEREGULATED.

Reforms were given a booster shot as the Government finally deregulated diesel. In what can be termed as a significant move, the Government has authorized the Oil Marketing Companies to revise diesel prices by a small amount over regular intervals. As a preliminary step the diesel prices were increased by 45 paise per litre.  Besides this, the Oil Marketing Companies are expected to supply diesel to bulk consumers at market determined price. This will help reduce under recovery on diesel and in turn reduce the subsidy burden on the Government. Market welcomed the move as the stock price of Oil Marketing Companies started zooming upwards.

  


GOVT BITES THE BULLET – 18/01/2013.

FINALLY DIESEL DEREGULATED.

Reforms were given a booster shot as the Government finally deregulated diesel. In what can be termed as a significant move, the Government has authorized the Oil Marketing Companies to revise diesel prices by a small amount over regular intervals. As a preliminary step the diesel prices were increased by 45 paise per litre.  Besides this, the Oil Marketing Companies are expected to supply diesel to bulk consumers at market determined price. This will help reduce under recovery on diesel and in turn reduce the subsidy burden on the Government. Market welcomed the move as the stock price of Oil Marketing Companies started zooming upwards.

TECHNICALLY SPEAKING. 

Sensex opened the week at 19689, made a high of 20126, low of 19689 and closed the week at 20039. Thus it registered a weekly gain of 376 points. At the same time the Nifty opened the week at 5967, made a high of 6083, low of 5962 and closed the week at 6064. Thus the Nifty went up by 113 points on a weekly basis.

Both the indices have formed a big Opening White body Marubuzo on the weekly charts. This pattern suggests that the bullish momentum is likely to continue. On the daily charts, both the indices have formed a Doji. It is sign of indecision. Only if we have a black body candle formation on Monday, then the Doji will be a Bearish Doji. Hence short term price movement will be affected by Monday’s candle formation.

When the Sensex closed above 19612 & Nifty above 5965, a Flag formation on the weekly charts got completed. The Flag pole started from a low of Sensex 18255 and Nifty 5548 and the targets as per this formation are Sensex 20969 and Nifty 6382. The targets will be achieved as long as Sensex remains above 19149 and Nifty above 5823. Since the Sensex and Nifty are still way higher, the above mentioned targets are likely to be achieved.

The indices are above the short term average of 20dma (Sensex – 19654 and Nifty – 5966), the medium term average of 50dma (Sensex – 19256 and Nifty – 5853), and long term average of 200dma (Sensex – 17907 and Nifty – 5435). Thus the trend in the short term, medium term and long term timeframes continue to remain bullish.

On the daily chats, both Sensex and Nifty have formed a Bullish Diamond pattern and the target as per this formation is Sensex 20171 and Nifty 6192. Also market had tested the Falling Channel Top and bounced back from there. Hence the overall long term target for Falling Channel pattern breakout remains intact. The targets as per this formation are Sensex 20383 and Nifty 6148.

On the weekly charts, both the indices have been moving higher in Flag formations and it had previously completed a Flag formation and the target according to the pattern comes in at Sensex 21024 and Nifty 6415. The targets will be achieved as long as the Sensex remains above 18255 and Nifty 5548. If we take the Saucer formation which is due to the fall from Sensex 18523 to 15748 and Nifty 5629 to 4770, then the target comes in at Sensex 21298 and Nifty 6488. Hence we have a Target zone of 21024 - 21298 on the Sensex and 6415 - 6488 on the Nifty.

Both the indices had bounced back from Sensex 18255 and Nifty 5548 which is within the Bullish Rising Gap between Sensex 18062-18284 and Nifty 5447-5526. This gap has acted as a strong support for the market even before as the Sensex had bounced back from a low 18291 and Nifty 5534. This gap holds more significance because a breach of this gap will signal the end of the current rally.

MACD has given a fresh Buy signal while remaining in positive zone. ROC too is positive and continues in Buy mode. The RSI has moved higher and is at 64, indicating that the bullish momentum has increased. MFI is steady above the equilibrium line at 57, suggesting positive money flow. Stochastic Oscillator (80) is in Sell mode as %K is below %D. ADX has increased further and is at 38 indicating that the uptrend is getting stronger. The Directional Indicators continue in Buy mode as +DI remains above -DI. OBV too has given fresh breakout and is in Buy mode. Bollinger Band continues with its Buy signal given three weeks back. Thus oscillators indicate positive outlook.

The Nifty O.I. PCR has increased to 1.41. Highest Open interest build up is at 6200 Call and 5900 Put. This suggests that the market expects a trading range for the Nifty with support coming in at 5900 and resistance around 6200 levels. Friday saw strong Put writing at the strike of 6000 indicating a short term support at that level.

Trendline Support for the Sensex is at 19808 and for the Nifty is at 5983.

For the week ahead, Sensex will find Support at 19736-19416-19137 and will find Resistance at 20332-20664-20917.

For the week ahead, Nifty will find Support at 5982-5905-5815 and will find Resistance at 6151-6243-6338.

INDEX LEVELS: 

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

5815

5905

5982

6064

6151

6243

6338

Sensex

19137

19416

19736

20039

20332

20664

20917

LAST WEEKS RECOMMENDATIONS: 

PAIR NO.

STOCK

REC@

TARGET

REACHED

1

Buy

TCS

1306

1353

1400

Sell

JPAss

93

90

89

2

Buy

Sintex

70

74

73

Sell

AdaniEnt

261

253

255

3

Buy

MindTree

733

755

772

Sell

Bhel

227

222

222

THIS WEEKS RECOMMENDATIONS: 

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy FinTech

1182

1169

1202

1224

Buy RiL

900

886

920

943

Buy IGL

274

266

287

302

Buy JsWEng

69

67

72

75

Buy UniPhos

141

138

146

152

WATCH OUT FOR:

IGL

Disclaimer : The recommendations made herein do not constitute an offer to sell or a solicitation to buy any of the securities mentioned. No representations can be made that the recommendations contained herein will be profitable or that they will not result in losses. Readers using the information contained herein are solely responsible for their actions. Information is obtained from sources deemed to be reliable but is not guaranteed as to accuracy and completeness.

Copyright © 2000 - 2018 Jatin Sanghavi. All rights reserved.
No part of the material on this website may be reproduced or distributed in any forms or by any means, electronics or mechanical without the written permission of the author.
Sitemap